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Using Activity Based Costing For Investment Decisions

Author

Listed:
  • Teodor Hada
  • Radu Matei Todoran
  • Teodora Maria Avram

Abstract

This article presents one of the most common tools in making investmentdecisions - Activity Based Costing (ABC). For this, we focused in the study on the literaturereview and practice using the ABC method in funding to establish investment decisions. We usefor exemplification a project financing with the objective based on upgrading a hotel throughcomplex arrangement works, achieved in order to obtain European funds. The basic informationused for the cost-benefit analysis we access using the financial layout related to the fundingmeasure that was desired accessing grants, information found in the financial statements of thecompany. The accuracy of the method used for this evaluation depends on the accuracy offinancial statements provided by the hotel that reflects the work. Thus, our results have allowedus to establish clearly the investment situation, but equally the sustainability and reliability,confirming the need of the hotel analyzed to access grants.

Suggested Citation

  • Teodor Hada & Radu Matei Todoran & Teodora Maria Avram, 2016. "Using Activity Based Costing For Investment Decisions," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(18), pages 1-3.
  • Handle: RePEc:alu:journl:v:2:y:2016:i:18:p:3
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    More about this item

    Keywords

    Activity Based Costing; project financing; financial statements; indicators; investment;

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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